PMMAF - Puma stock plunges despite record revenue

PUMA SE ( OTCPK:PMMAF ) shares slid sharply on Wednesday despite reporting record second quarter revenue.

For the second quarter, the German apparel and footwear manufacturer reported a 25.8% jump in revenue to €2.0B,  coming in €110M above expectations. Net earnings also improved by 73.2% from the prior year.

“We exceeded € 2 billion in quarterly sales for the first time in PUMA’s history,” CEO Bjørn Gulden said. “I am especially proud that we have again seen very strong growth in all our performance categories like Running, Training, Teamsports, Golf and Basketball.

To be sure, gross profit margin fell 100 basis points from the prior year due to higher freight costs and general inflationary concerns.

“Despite increasing costs, we will continue to focus on keeping our prices competitive and will prioritize sales growth and market share gains above short-term profitability,” Gulden said. “We do see an increased level of uncertainty around the world: COVID-19 is still around us, the crisis in Ukraine is worse than ever and there is high inflationary pressure in almost all our markets. Despite all these uncertainties we will continue to invest into our people, brand and infrastructure.”

Management remained confident in the long term sales outlook for the company. The company raised its outlook from a prior forecast of at least ten percent currency-adjusted sales growth – with upside potential – to mid-teens currency-adjusted sales growth. However, profitability is likely to remain uncertain/

“We expect inflationary pressures from higher freight rates and raw material prices, as well as operational inefficiencies due to COVID-19 and the Ukraine crisis, to dilute our profitability in 2022,” a company statement concluded.

US-listed shares declined 5.65% on Wednesday amid the uncertainty .

For further details see: